Budget 2026: Dividend collections set to scale new high; likely to beat budget estimates in FY26
Budget 2026: Dividend inflows to the exchequer from non-financial central public sector enterprises and firms in which the government holds minority stakes are expected to surpass the budgeted estimate for the fifth year in a row in 2025-26 and touch a new peak.Despite this likely outperformance, the Centre is expected to retain its original dividend assumption of Rs 69,000 crore in the revised estimates for 2025-26, opting for a cautious stance in view of prevailing global and domestic uncertainties, a source told ET.In 2024-25, dividend earnings touched an all-time high of Rs 74,129 crore, far surpassing the budget estimate of Rs 56,260 crore as well as the revised projection of Rs 55,000 crore. Repeatedly stronger-than-anticipated dividend inflows have helped offset muted disinvestment proceeds in recent years, while also underscoring the robust financial performance of CPSEs.
Exceeding expectations
Latest figures from the Department of Investment and Public Asset Management show that dividend receipts from these entities already amount to Rs 44,862 crore in the ongoing financial year – which is nearly 65% of the annual target. Since a large share of dividend payouts is usually received in the final quarter, overall collections are widely expected to exceed the budgeted figure.Disinvestment receipts have stayed weak this year, with proceeds of Rs 8,768 crore so far. From 2024-25 onward, the government has discontinued the practice of setting a standalone disinvestment target. Instead, it has opted for a combined objective covering divestment and asset monetisation, pegged at Rs 47,000 crore for the ongoing financial year.The strategic divestment of IDBI Bank is currently underway and is expected to be concluded before the close of the fiscal. However, the actual inflow from the transaction is likely to be realised in the first quarter of the next financial year.“If all goes well, dividend collections this fiscal will beat estimates again,” a senior government official was quoted as saying by the financial daily. “Much will depend on the performance of state-run oil companies in the March quarter.”Falling global crude prices are expected to bolster the profitability of public sector oil companies, allowing them to maintain robust dividend distributions.Brent crude futures gained around 2% during intraday trading on Monday to $61.86 a barrel. Despite the rise, prices remain nearly 17% lower than a year ago due to ample global supply, even as uncertainty persists over efforts to secure a resolution to the Ukraine conflict. Goldman Sachs recently forecast that Brent crude would average about $56 per barrel in 2026.
